tv Barrons Roundtable FOX Business August 7, 2022 11:30am-12:00pm EDT
all this is a russian wide disease of corruption and it needs to be exposed at the very least and it can lead people to account. let's see how they go. >> thank you very much thank you for taking this on, miranda devine. that is it for this week i'll be back next week with more cal >> donetsk sponsored by global x ets. ♪♪ jack: welcome to "barron's roundtable" as we prepare you for the week ahead. i am jack hough in for jack are. paramount ceo bob bakish on battling for ad dollars and
following up the theaters success of top gun maverick. iconic industrial giant general electric about to split into 3 companies. what it could mean for investors. we begin with 3 things investors should be thinking about right now. the july jobs report, the economy adding 528,000 jobs despite rising interest rates and high inflation, is it all good news for stock investors? the world's largest chipmaker caught in the middle of taiwan's tensions with china, which companies will benefit as production moves to the us and online dating company match is pulling back on investment in the meta verse. what it means for finding true love and or capital gains. on "barron's roundtable," my colleagues and levinsohn, carleton english and al roots. twice as many as predicted, wages were good too.
that is sometimes a kind of good news investors interpret as bad news if they think interest rates will rise, the fifth time they took good news as good news, are we back to good news being good news again? ben: the nasdaq did finish down on the day but not enough to send the market tumbling the way people thought it would with this kind of number. inflation is sticky, this number shows growth is sticky we are not heading into a recession the way everybody thought we were a week or 2 ago and that helped buoy the market on the week. jack: everyone is watching for earnings estimates to tumble, the economy is weakening, when will those take stock prices with them. does this mean they will not we can and earnings will stay strong and the market will stay strong? will it end the year higher? frame your answer in the form of absolute certainty. ben: earnings will probably remain strong because inflation remains strong keeping nominal
economic growth strong and sales are correlated with growth. earnings go up as long as margins don't get crushed. earnings should be able to hold up as well. if the market does finish the year higher from here, in an election year like this market wraps up into year end. jack: my calendar says international cat day monday and international bowling day saturday. anything else for investors? >> watch the inflation report next week, the next thing people are watching to see what the fed might do, will it raise rates a lot more like the payroll report or will it stop and in a way that suggests they will get it back? jack: speaker pelosi visited taiwan this past week and after she left china fired test missiles including into japanese waters, doesn't sound
good for anyone's 401(k). do investors have to worry about taiwan's role in the semiconductor supply chain? al: the short answer is yes. this is geopolitics, national security, chip supply, taiwan is responsible for 50% of semiconductors globally. the responsible, 90% of the leading-edge chips so you have this little island caught in the middle of this geopolitical uncertainty and it is worth watching. jack: the chips act has passed congress, it will spur chip reduction in the us, how about companies with long-term investors you think might benefit? >> intel is the obvious one, companies that make equipment for these chipmakers, asm l and some of the smaller companies
should all benefit as we try to reassure the things we sent away over the last generation. jack: what is this i hear about match pulling back from meta-verse dating and what is meta-verse dating? carleton: if you take the awkwardness of regular dating and have a zoom video overlay you have meta-verse dating and match, companies like you but and tender, finding they don't know what this will look like. they have this vision of a single town where avatars could connect and use things called tender coin to buy virtual items. all the terrible, awful, frustrating things about dating in the universe. jack: there is a rumor that my hair is starting to thin up top. could i put been's hair on?
carleton: not clear what the verification level is. jack: that evers aside what are the prospects for match and other online dating stops? carleton: no one knows what the future of meta-verse is going to be your people will want to buy into it, you have meta-which used to be known as facebook, we are spending billions and don't know where we will get millions, outlook is frustrating. jack: those that mean you would not be a buyer? carleton: in the case of match it's not just the meta-verse, it does not return to pre-pandemic level. jack: the top gun sql give a jack: the top gun sql give a boost to global revenue.
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jack: my guest knows about quality television but for the next 5 minutes he is stuck with me. paramount global president and ceo bob bakish, tell me the latest on advertising. everyone is watching for signs of a slowdown not just on tv but across dot.coms. >> there is head wind and tailwind, we closed the second quarter where we did see challenges, the digital market in particular. that was macro economically driven. we are seeing categories like auto struggling with supply chain, package goods wrestling with inflation issues and ingredient costs.
on the positive side, some categories, travel as an example, just closed our best multiplatform upfront. cable usually tucks in under. of two category tailwinds, pharmaceutical came big for us, that is a big category. we are excited about that and we've got politico in the back half of the year and what is going on in the midterms is big business and usually that is big news but with targeting big business. jack: netflix and disney will add cheaper ad supported tears. that validates what you have been doing at paramount but is more competition for you. suppose it is next year, i come to you for the pitch, which of
these streaming platforms to spend money on, what is the pitch for yours? >> we've been believers in advertising in streaming from the beginning. people wondered what it was back then. at the end of 18, a $70 million business, we closed 21 in $1 billion, advertising works on streaming, and in reverse order, validation that we believed all along. ad supported here on paramount plus. we appeal to different types of consumers, some don't want the interruption and some are fine having it. with respect to them entering the ad market, the ad market has been competitive for a long time. what is important is a strong
position here and look at our asset portfolio, and in streaming. the combination, the ecosystem provides 1 trillion a year. jack: the future of streaming/television is liquid about legacy television, i'm just the magazine guy who turns on the tv a couple times a week but it is a hugely profitable business. is the future as profitable? >> we see a strong future. we are in the middle of transformation. we operate in the traditional media segment, broadcast, cable, theatrical, films, as well as the most important growth marketing media which is streaming. we operate a free streaming segment and the pay segment with paramount plus and other products. we are in a transition of consumer behavior from linear to streaming. i happen to believe linear
behavior will stick around for a long time. people like her lean back experience and even today has more consumption than the streaming space but nonetheless we are building a streaming future. when we look at that streaming future we see the margin characteristics approaching tv media today. we just got to get it to the scale it needs to be. jack: you brought out a new jackass and a new beavis and butthead for culture snobs like myself. top gun in theaters, the biggest hit ever, what do you do to follow that up. what is your next top gun? >> we are thrilled with top gun marek. it has been an incredible film that performed above expectations. it appeals to consumers young and old. in the center of the country and all over the world it is another film. people are going to watch it multiple times and it has been great in theaters and once it gets to paramount plus it will
be great there as well. in terms of follow-up we have an incredible slate at paramount. if you like tom cruise fills we have mission impossible 7 miss excited about that. if you look at younger kids we have another movie, transformers movie coming next year. we have a take on the dungeons and dragons franchise, incredible product coming. jack: there has been incredible inflation, still a good deal, the rights that you hold for good return on investment? >> we are in the sports business, one of the preeminent brands with marquee properties like the nfl and the ncaa and pga, up important component of our business, traditional television and streaming as well. we like that position. there has been inflation in
sports rights for sure but the business makes sense for us. on a stand alone basis and in combination, what you have is what we call cohorts. people watch the nfl but also survivor or something like that. that combined usage is important. jack: do i have to play dungeons and dragons to appreciate it? >> you can just jump in. jack: i will drop the 12 bucks and figure out for myself. power giant ge spinning off power giant ge spinning off into 3 separate companies, how
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years of history on an investment show, it could break a person to try. tell me when. thomas edison's business interest including lightbulbs, a hand in the rise of radio television at home appliances like this all electric washer with quick, clean technology. ge made gas turbines in the 1930s intentions for us borrowers in world war ii, neil armstrong and buzz aldrin more moon boots made of ge rubber. from the 1980s through the early 2000s diversified into can't miss nonindustrial pursuits like show business and subprime mortgages, the housing bubble hit, ge stock collapsed and the company was busy dismantling itself ever since,
appliances and lightbulbs, management has a new breakup. 20 seconds over. jack: should hydrated before. tell me about the breakup plan and whether it will work. al: we have three countries, one dedicated to aviation, another to healthcare and another to power generation. jack: unlock higher value for shareholders. al: all comparable companies trade for better multiples than today. aviation probably the crown jewel of the whole thing will get higher valuation. the whole thing could be related to $100 million, almost the market of ge today. ben: which one should i really keep? which is the best of those? >> the aviation business will be owned and loved by institutions with good growth, good profit margins so you hold
on to aviation as growth as reasonable price type stock. healthcare, i will sell the healthcare business, better owned by people -- it won't be covered by industrial analysts anymore. i will hold on to the deep value play, the power business not performing very well, wind business doesn't make money, people worry the gasturbine business will go away as governments, fossil fuels, things will turn out better than people expect, might trade weekly. carleton: when i was in a kid, 25% a year, what went wrong? al: good question. ge's management culture was venerated, copied, centralizing decision-making.
they lost touch with the operations of their businesses. they had a penchant for big splashy acquisitions of which jack outlined. acquisitions didn't work so they placed big bets and they went bad and the third thing that happened was they got too unwieldy, they were doing everything. they were conglomerate's conglomerate. when things went bad it was an epic turnaround process that has taken 3 years to get to the point they could think about breaking up. this is the ultimate play on decentralized management and what happened the last generation. carleton: any thoughts on these conglomerates at risk of d conglomerate arising? jack: 3 and will spit out there
healthcare business, they still post it notes the industrial transportation business, that stock peaked in 2018, that will draw activists and that the answer. jack: that is exciting. 20 seconds. give me your favorite industrial stock. al: i'm a big fan of eaton. eaton is the stock. it trade 18 times earnings but leverage it to all of these trans electric vehicles, grid resiliency. i like the management, that is my favorite. jack: roundtable members give their investment (fisher investments) in this market, you'll find fisher investments is different than other money managers. (other money manager) different how? aren't we all just looking for the hottest stocks? (fisher investments) nope. we use diversified strategies to position
our client's portfolios for their long-term goals. (other money manager) but you still sell investments that generate high commissions for you, right? (fisher investments) no, we don't sell commission products. we're a fiduciary, obligated to act in our client's best interest. (other money manager) so when do you make more money, only when your clients make more money? (fisher investments) yep. we do better when our clients do better. at fisher investments, we're clearly different. trelegy for copd. [coughing] ♪ birds flyin' high, you know how i feel. ♪ ♪ breeze driftin' on by... ♪ if you've been playing down your copd,... ♪ it's a new dawn, it's a new day,... ♪ ...it's time to make a stand. start a new day with trelegy. ♪...and i'm feelin' good. ♪ no once-daily copd medicine... has the power to treat copd in as many ways as trelegy. with three medicines in one inhaler, trelegy helps people breathe easier and improves lung function. it also helps prevent future flare-ups. trelegy won't replace a rescue inhaler for sudden breathing problems. tell your doctor if you have a heart condition
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roundtable" brought you like global x, for more information visit foxbusiness.com/"barron's roundtable". jack: carleton, let's talk paypal, the stock has done, there is an activist investor in elliott management. will it work? carleton: i have confidence in elliott's admission. what i used to pay back with the burritos i buy but basically this is a company that got ahead of itself during the pandemic but there is a solid business, it became undervalued during the selloff we saw in check companies. you've got to get costs under control, return capital to shareholders. you have an activist there that is accountable.
jack: give me a stock to love or too low. al: i want to dislike lucid, the electric vehicle stock. they make 6500 cars, they are having supply chain problems, still $30 billion, stock is down 10% after they said that. jack: don't how you are breaking into the car business. yeti, last christmas you told viewers to avoid it, the stock is tanked on earnings. what should investors do? al: ben: the stock benefited from the pandemic, they were looking at $80 coolers and decide to buy them. now we are here, inflation is roaring, food prices are high, people aren't buying $480 coolers or going online.
i would give this some stock or going. jack: $20 at dick's or walmart, great ideas and thank you. to read more check out this week's addition, barron.com, follow us on dr. michael youssef: galatians 6:7, says, "do not be deceived: god is not mocked. whatever a man sows, he will also reap." jacob was deceived by rachel's father just as he deceived his father. you say, "god has forgiven me. all of sins are covered by the blood of jesus christ are now forgiven." yes, but consequences can live on. male announcer: up next on "leading the way."